The Scariest Thing For Anyone Thinking About Buying The Facebook IPOhttp://www.businessinsider.com/facebook-revenue-growth-2012-4/comments
en-usWed, 31 Dec 1969 19:00:00 -0500Sun, 02 Aug 2015 14:56:08 -0400Jay Yarow and Kamelia Angelovahttp://www.businessinsider.com/c/4f9714fe69bedd9d0f000015Pat SaisonTue, 24 Apr 2012 17:02:54 -0400http://www.businessinsider.com/c/4f9714fe69bedd9d0f000015
Facebook's valuation should be based on some rigorous analysis, and examined rationally. That Instagram acquisiton, as someone also mentioned, is revealing. Facebook is very vulnerable, to another startup.
Fad or Trend, is always a good question to ask--fads can go out of fashion overnight. Another thing to consider is saturation and ennui. Cannot keep growing at the pace, and any projection assuming continuation of the same is fallacious--the world has a finite amount of people, and the number of new converts is limited. Some people will abandon FB due to ennui--it was cool, and neat, but hey, let's move on to something else, and it is tiring in some ways to keep up on FB.
The IB's like to hype FB, FB likes to hype FB, everyone wants in on the IPO to make a killing, and getting it while the getting is good--the greater fool theory is also at play, and there is a sucker born every minute.
Am reminded of a story about a wealthy man buying stock. He kept buying, and it kept going up, finally, when it stop rising, he told the stockbroker to sell, and the stockbroker said, to whom, you were the only person buying the stock. There was no one to take him out.
So the IB boys hype it up, create buzz and interest, 100 billion valuation, 200 billion valuation, to prep the potential market--the suckers are all salivating, the greater fool is next door, palms are sweating, can't miss this great oppt to get in on this deal, make a killing. The gate goes up, and off they go, grabbing shares. At the end of the race, FB is happy, the IB's are smiling, and so are the lucky ones who got their shares. Those who flip, locked in their gains, those who hold, are assuming there is a greater fool out there who will take him out--there is hope, because a sucker is born every minute. But wait, this is a bubble, it burst, then the panic, please buy my stock, any price, just take me out of my investment. The IB's and FB cashouts are still smiling, they locked in and got out--sucker, they shout, you're screwed and we are happy, Ha, Ha! The free enterprise system is great, God Bless America.
A market depends on the manipulation of the masses. Think Dutch Tulip Bubble, Think AOL in its heyday, think Yahoo.
What is FB afterall, akin to invention of the atom bomb, the transistor, air conditioning, refrigeration, radio, televison, the PC, telephone and telegraph, the internet, the printing press, or even the wheel? Is it a staple, like food, air and water, we need to have a daily dose. Nah, it is just an alternative form of social media, a platform that has become quite popular, which provide access to many potential customers who share their personal information.
Let's get down to earth on this; that 100 Billion valuation is Investment Banker and FB hype.http://www.businessinsider.com/c/4f96a555ecad046946000006Newt from the MoonTue, 24 Apr 2012 09:06:29 -0400http://www.businessinsider.com/c/4f96a555ecad046946000006
Sorry but my 80 yr old grandmother just got on Facebook. We set it up on her iPad3 for her so that she can see pictures of her great-grandchildren. Of course all she does is push the FB App button and the iPad App is not ad supported so there you go. FB isn't going anywhere but the CEO isn't overly concerned about revenue. Nice speculative buy at a $20 billion valuation. Not so much at 5x that.http://www.businessinsider.com/c/4f96527669bedda834000035JohnsonTue, 24 Apr 2012 03:12:54 -0400http://www.businessinsider.com/c/4f96527669bedda834000035
The big payoff for Facebook is when they get search.
The company still hasnt discovered/laid out all its potential income streams yet.http://www.businessinsider.com/c/4f963e0069bedd4d21000008JayJkTue, 24 Apr 2012 01:45:36 -0400http://www.businessinsider.com/c/4f963e0069bedd4d21000008
YHOO brings in similar amount of revenue and profit as Facebook does, but the company's valued at about 19 billion. Since Facebook is trading at 80-100 billion valuation even before the IPO, they need to have stellar growth not just for this year, but for several years. If Facebook's growth slows down even before the IPO, there's just no incentive to buy at that valuation. GOOG's still growing quite strongly for a large business, but it's valued at about 4-5 times sales at 200 billion. If Facebook's growth slows down to GOOG's, they should be valued at something like 25 billion, so their growth must not slow down to maintain that 100 bil market cap.http://www.businessinsider.com/c/4f9608f169beddbc3800002aJohn TillmanMon, 23 Apr 2012 21:59:13 -0400http://www.businessinsider.com/c/4f9608f169beddbc3800002a
FB is vying for dollars in a market that is already pretty saturated. Unlike Google, it can not grow profits by 40% year after year. It is already going to offer at $100 B. With P/E of 100 and decelerating growth - it is not a good play for long term investors - short term speculators - may be.http://www.businessinsider.com/c/4f95e9b46bb3f7eb63000047FB advertiserMon, 23 Apr 2012 19:45:56 -0400http://www.businessinsider.com/c/4f95e9b46bb3f7eb63000047
Facebook ads are very expensive and difficult to manage. Yes, you can target potential customers, but the effort is not really worth it. The big payoff for FB will come when they start charging corporate accounts that have a lot of "Likes"http://www.businessinsider.com/c/4f95e80469bedd3d6300003fTucan the Wandering Horseradish SalesmanMon, 23 Apr 2012 19:38:44 -0400http://www.businessinsider.com/c/4f95e80469bedd3d6300003f
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The scariest thing is that they get 10%+ of their revenue from Zynga.
Zynga sells digital fertilizer for fake cyber farms.
Hmmm... fill up the tank or buy digital fertilizer?http://www.businessinsider.com/c/4f95e0c5eab8ea3c47000008Kabelo NkakalaMon, 23 Apr 2012 19:07:49 -0400http://www.businessinsider.com/c/4f95e0c5eab8ea3c47000008
Not possible. Facebook has pretty much become a way of life. The real issue should be whether or not they can grow revenues going forward?http://www.businessinsider.com/c/4f95d7eeecad04aa76000040Dennis954Mon, 23 Apr 2012 18:30:06 -0400http://www.businessinsider.com/c/4f95d7eeecad04aa76000040
Facebook is just a fad that appeals primarily to young people. As we all know, young people are fickle and are quickly bored. Sooner or later, a new fad wil emerge and the Facebook users will migrate in droves and Facebook will become the latest AOL.http://www.businessinsider.com/c/4f95d460eab8ea1529000073Beltway JimmyMon, 23 Apr 2012 18:14:56 -0400http://www.businessinsider.com/c/4f95d460eab8ea1529000073
Two words: popular kidshttp://www.businessinsider.com/c/4f95d30feab8ea662600008bdlmcdonoughMon, 23 Apr 2012 18:09:19 -0400http://www.businessinsider.com/c/4f95d30feab8ea662600008b
Yes, I mean imagine what would happen if someone like Google really threw their weight behind this, and addressed the annoying privacy issues, and separated out people's sub-group's, and if they then connected it to all their other products to drive adoption? That would kill FB! Or not...http://www.businessinsider.com/c/4f95ce0d6bb3f7db4200005emarch21Mon, 23 Apr 2012 17:47:57 -0400http://www.businessinsider.com/c/4f95ce0d6bb3f7db4200005e
It may be easy o develop another Facebook but how does one coax people to migrate? No one will want to migrate unless their freinds migrate with them.http://www.businessinsider.com/c/4f95ccddeab8eacf21000065SchmidtMon, 23 Apr 2012 17:42:53 -0400http://www.businessinsider.com/c/4f95ccddeab8eacf21000065
Facebook is like a potato: one is just like the other. Tomorrow, another Facebook can be developed by some student and destroy Facebook over night. In my opinion, the Instagram panic deal is a proof of this assumption.
FB is often used as an acronym for Facebook. Tomorrow it could mean 'Foolish Bet'.http://www.businessinsider.com/c/4f95cb7aeab8ea0822000047JamesMon, 23 Apr 2012 17:36:58 -0400http://www.businessinsider.com/c/4f95cb7aeab8ea0822000047
Hard to believe that Facebook has been around for almost 10 years now.http://www.businessinsider.com/c/4f95cb74eab8ea632400003fAndrew HallMon, 23 Apr 2012 17:36:52 -0400http://www.businessinsider.com/c/4f95cb74eab8ea632400003f
A reasonable valuation for a company with between $1-2b in profit is $15-30 billion. $100 billion is a pure speculative frenzy.http://www.businessinsider.com/c/4f95ca47ecad04966600001dDowsMon, 23 Apr 2012 17:31:51 -0400http://www.businessinsider.com/c/4f95ca47ecad04966600001d
It's too early to say that Facebook's growth is rapidly decelerating. It could be seasonality. It could be a one-off drop, consolidation - a lot of different factors. Even in the worst growth figure above, it's still above 40% year-on-year. Deceleration is always going to happen on explosive growth like that. Question is, can Facebook continue to increase its revenue and that seems to be a massive 'yes'. And Facebook revenue is nearly $1.2 Billion. Pretty impressive to me.